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Industrial Localization. An Empirical Test for Marshallian Localization Economies

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  • Hammond, George
  • von Hagen, Jürgen

Abstract

This paper presents empirical tests of the hypothesis that firms cluster geographically due to Marshallian localization economies. The hypothesis implies that changes in employment in localized industries should be more closely related within the regions than across regions. We develop an empirical test of this hypothesis using annual employment data for four US cities and three industries (two-digit SICs) in the durable manufacturing sector. The results suggest that asset sharing is a significant source of localization economies, and that labour pooling effects may play an important role in rapidly growing labour markets.

Suggested Citation

  • Hammond, George & von Hagen, Jürgen, 1994. "Industrial Localization. An Empirical Test for Marshallian Localization Economies," CEPR Discussion Papers 917, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:917
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    Citations

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    Cited by:

    1. Junius, Karsten, 1997. "Economies of scale: A survey of the empirical literature," Kiel Working Papers 813, Kiel Institute for the World Economy (IfW).
    2. Raul Ramos & Esteban Sanroma, 1998. "Regional structure of wages and external economies in Spain," ERSA conference papers ersa98p160, European Regional Science Association.

    More about this item

    Keywords

    Economic Geography; Regional Economics; Regional Integration;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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